Labour Court Database __________________________________________________________________________________ File Number: CD87744 Case Number: LCR11566 Section / Act: S67 Parties: PENN CHEMICALS - and - ETU;NEETU/AEU |
Claims on behalf of approximately 25 craftsmen for an increase in wages and annual leave allowance under the 26th wage round.
Recommendation:
10. The Court having considered the submissions from both parties
recommends as follows:-
Pay - 5.2% increase from 1st December, 1986 to 30th
November, 1987.
Annual leave - The Company's offer to day workers of an extra
2 days annual leave subject to a reduction of
2 days in the uncertified sick leave allowance
should be extended to all the workers involved
in this claim and accepted on this basis.
Division: Ms Owens Mr McHenry Mr O'Murchu
Text of Document__________________________________________________________________
CD87744 RECOMMENDATION NO. LCR11566
INDUSTRIAL RELATIONS ACTS, 1946 TO 1976
SECTION 67
PARTIES: PENN CHEMICALS B. V.
AND
NATIONAL ENGINEERINS & ELECTRICAL TRADE UNION
AMALGAMATED UNION OF ENGINEERING WORKERS'
ELECTRICAL TRADE UNION
SUBJECT:
1. Claims on behalf of approximately 25 craftsmen for an increase
in wages and annual leave allowance under the 26th wage round.
BACKGROUND:
2. The Company which is a subsidiary of a U.S. based company,
Smith Klime Beakman Corporation commenced operations in Cork in
1975 and currently employs 250 workers. The main product produced
in Cork is an ulcer treatment which was launched on the market in
1976.
3. A Trade Union group agreement was established in 1974, but the
Company has held seperate meetings with the craft unions and the
Irish Transport & General Workers' Union in the last 2 wage
rounds.
4. The 25th wage round expired on 30th November, 1986. On 8th
December, 1986 and 13th March, 1987 the Unions lodged seperate
claims under the 26th wage round. A meeting to discuss these
claims was held on 15th April, 1987. A further meeting was
arranged for 30th April, 1987 at which the Company would respond
to the Unions' claims. This meeting was postponed until the 1st
July, 1987. At this meeting the Company offered a 4% increase
from 1st December, 1986 for a 15 month agreement. The Company
also offered to increase the basic annual leave entitlement for
day workers by 2 days with effect from January, 1988 subject to
there being no claim for additional leave on the part of shift
workers and that uncertified sick leave be reduced by 2 days and
that the leave year would run from January to December instead of
from April to March. At the conclusion of the meeting the Unions'
indicated that they were prepared to consider a variety of
proposals that would achieve both parties aspirations. The
Unions' also indicated that they needed time to consider the
implications of a letter dated 22nd June, 1987 concerning the
possibility of their members entering into individual agreements
with the Company on pay and conditions. In the interim it was
agreed to pay arrears of wages from 1st December, 1986 to 31st
July, 1987 an assumption of a 5.2% increase. This payment was
paid in August, 1987 and was without prejudice to the position of
either side to the outcome of negotiations on the pay round.
5. At a meeting held on 25th August, 1987 the Unions' informed
the Company that they were not interested in pursuing individual
agreements and that they wished to resume wage negotiations.
However no agreement was reached and the matter was referred to
the conciliation service of the Labour Court on 4th September,
1987. A conciliation conference was held on 24th September, 1987.
As no agreement was possible both parties agreed to referral to
the Labour Court for investigation and recommendation. A Court
hearing was held in Cork on 4th November, 1987.
6. The position of the parties prior to the Court hearing were as
follows:- Unions' position
(1) 7% increase from 1st December, 1986 to 1st January, 1988 - 13
month agreement.
(2) 2 days additional annual leave for all workers.
Company's position (1) 5.2% increase from 1st December, 1986 to
31st January, 1988 - 14 month agreement.
(2) An improvement of annual leave of 2 days to day workers
subject to a reduction of 2 days in uncertified leave; to there
being no claim for consequent increase for shift workers and to
the leave years changing to a calander year.
UNIONS' ARGUMENTS:
7. 1. The average percentage wage increase for comparable
industries in the region is 8.21% (details supplied to the
Court).
2. The Company have claimed the main reason for not paying
comparable increases is that their rates are the highest of
these companies and they wish to claw back money on that basis
because they cannot afford to maintain their position in the
present circumstances. However the Company in their offer to
individual members in their letter dated 22nd June, 1987
(letter outlining individual agreement) proposed to increase
craft rate of pay in economic terms by a minimum of 7.2% up to
a maximum of 23%.
3. The Company in trying to reach individual agreements with
the workers were in breach of the Trade Unions'/Company
agreement.
4. The current annual leave in the Company has been unaltered
since 1982 and is the lowest of any company in the region,
this the Company acknowledges but seeks to redress the anamoly
by substituting sick leave for annual leave for day workers
only. The Company/Unions agreement dated October, 1974
provides for:
" One uncertified absence for up to 3 days will be paid for
each year."
7. 4. All staff employees in the Company have a minimum of 22
days for day workers and an extra 5 days for shift workers +
uncertified sick leave.
5. The Trade Unions' consider that it is totally unjustifable
for a Company to offer levels of remuneration to our
individual members contrary to our agreements while refusing
to conceed a similar increase through the official negotiating
procedure of the Company/Union agreement particularily given
the history of the Craft Unions' and their members in relation
to an excellent industrial relations record. The Company have
consistently acknowledged this excellent record.
COMPANY'S ARGUMENTS:
8. 1. Increase in pay: The Company's offer is fair and
reasonable in view of the high settlement conceded under the
25th wage round (details supplied to the Court). As a result
the earnings in 1987 will be 2.8% higher than in 1986 before
any 26th round settlement.
2. By comparison with comparable employments the rates of pay
for craft workers are high. This situation cannot be
sustained in the light of the competitive pressures faced by
the Company. The Company carried out a survey of 9 local
companies. It should be noted that 3 of the companies are
involved in the manufacture of competitive products. Of these
the Company has the highest basic rate of pay. (Details
supplied to the Court).
9. Holiday entitlements: The Company has carried out a survey
of holiday entitlement in comparable companies which operate a
four shift system. No evidence has been found that the
holiday entitlements at Penn Chemicals are out of line.
Furthermore because of the holiday cover agreement the cost of
holiday pay is significantly higher than in other companies.
The Company is not in a position to consider any increase in
current holiday entitlement until such time as the obligation
to cover holiday absence is removed.
RECOMMENDATION:
10. The Court having considered the submissions from both parties
recommends as follows:-
Pay - 5.2% increase from 1st December, 1986 to 30th
November, 1987.
Annual leave - The Company's offer to day workers of an extra
2 days annual leave subject to a reduction of
2 days in the uncertified sick leave allowance
should be extended to all the workers involved
in this claim and accepted on this basis.
~
Signed on behalf of the Labour Court.
Evelyn Owens
___4th__December,___1987. ___________________
M. D. / M. F. Deputy Chairman